Eleven rules of choosing business management software: Rule 9

Continuing with our suggested list of eleven "rules" to help guide small and medium sized companies when they evaluate potential suppliers of business management software...

Rule 9: Discounts can be pyrrhic victories

In general, a sale will always include some space for negotiation, and it is normal that the dealer will want to press the supplier with the hope of receiving a better deal.

But basic economic rules impose limits.

You can be sure that every concession extracted from the DMS supplier will be balanced by a reduction in the services that they provide.

So although a big discount may initially look like a victory for the dealer, it will most likely be detrimental to the overall success of the project.

If we think as the new DMS system as the dealership’s main instrument for recording, managing, controlling and planning business activities, then expect to invest a whole lot of time and effort in this project… not just money.

So surely we can agree that this is a strategic investment.

A quality implementation will have a direct effect on your business, so it is preferable to obtain a credible commitment from the DMS supplier towards a successful deployment, than a few dollars in savings.

So, be wary of suppliers who offer significant discounts or price reductions, especially regarding training and accompaniment during the “go-live” stage.

This kind of concession by the supplier will certainly translate into a reduction of vital services needed to guarantee a successful deployment.

And most likely, you will end up realizing, too late, that you do need those services. But since you’ve already committed so much time, money and effort with this supplier, they can now begin to reel you in.

Posts in this series:

• Rule 1: Make sure the new system can accompany your company’s growth

• Rule 2: Does the system stay up-to-date regarding fiscal compliance?

• Rule 3: Attend a demo

• Rule 4: The system should be flexible

• Rule 5: Training is essential

• Rule 6: Choose a supplier that provides more than just a system

• Rule 7: Ask how technical support is handled

• Rule 8: Be wary if the system is too simple

• Rule 9: Discounts can be pyrrhic victories

Tags: Autologica, DMS, ERP, SMB, SMBs, dealer management systems, auto dealer software, automotive, auto industry, automotive industry, auto dealer, auto dealers, car dealer, car dealers, motor vehicle dealer, motor vehicle dealers

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